Financial Services, Latvia, Legislation, Pensioners

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Constitutional Court in Latvia orders pension cuts lifted

Alla Petrova, BC, Riga, 21.12.2009.Print version
The Constitutional Court in Latvia today ruled that the government's decision to reduce pensions by 70% for working retirees and by 10% for other pensioners was unconstitutional. The Constitutional Court essentially evaluated whether pensioners' right to social security had not been violated. Although the Constitution does not entitle residents to any specific amounts of welfare benefits and pension, the Constitution states that the state must guarantee residents' right to social security.

The case was reviewed by a panel of six judges, presided at by Constitutional Court Chairman Gunars Kutris, since November 23. Today, Kutris signed the Constitutional Court's ruling in the case.


The ruling will enter into force after it is printed in the government's official newspaper Latvijas Vestnesis.


The Constitutional Court started review of the case on November 23 to consider whether the 10% pension cuts and 70% pension reductions for working retirees in the period from 2009 to 2012, that were approved on July 1, conformed to the Constitution.


By end-July, the Constitutional Court had received already 9,000 petitions protesting the pension cuts, and the court requested residents to stop complaining about matters that the court had already resolved to consider.


Initially, the Constitutional Court launched two cases, one on the reduction of pensions by 10% and the other on 70% pension reductions for working retirees, but later these two cases were combined into one.


The Constitutional Court decided that it would consider whether the amendments to the Pension Law conformed to the Constitution's Articles 1, 91, 105 and 109, and whether they were discriminatory against pensioners.


The Constitution's Article 1 states, "Latvia is an independent democratic republic", Article 91: "All human beings in Latvia shall be equal before the law and the courts. Human rights shall be realized without discrimination of any kind", Article 105: "Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation", and Article 109: "Everyone has the right to social security in old age, for work disability, for unemployment and in other cases as provided by law."


The Constitutional Court also decided that, given the very large number of plaintiffs, the case would be reviewed in writing and without inviting all the plaintiffs to court hearings.


Welfare Minister Uldis Augulis (Union of Greens and Farmers) said in a television interview in mid-December that if the Constitutional Court ruled the pension cuts unconstitutional, the state would have to compensate pensioners about LVL 100 million altogether.


New Era board chairwoman Solvita Aboltina said in a press statement on December 20 that if the Constitutional Court ruled in pensioners' favor, pensioners would be fully compensated their losses.


Whatever the Constitutional Court's verdict, it will be implemented, Aboltina stressed.

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